INQUIRY INTO EXPANDING MEM ERSHIP OF THE …

INQUIRY INTO EXPANDING MEMBERSHIP OF THE COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP Submission by the Department of Foreign Affairs and Trade

April 2021

Inquiry into expanding membership of the Comprehensive and Progressive Agreement for Trans-Pacific PartnershipSubmission 49

INQUIRY INTO EXPANDING MEMBERSHIP OF THE COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP i

TERMS OF REFERENCE

The Joint Standing Committee on Foreign Affairs, Defence and Trade shall examine the potential new members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the case for their accession based on Australia's national interests. The Committee shall have particular regard to:

• the opportunity for freer trade between Australia and potential new members;

• the merit of the CPTPP as the vehicle to realise freer trade opportunities;

• issues related to expanding and improving market access;

• the impact of other members committing to similar high standards;

• issues relevant to the values, rules and norms of the CPTPP;

• the role of the CPTPP as a vehicle for economic collaboration and cooperation; and

• any other related matters.


INQUIRY INTO EXPANDING MEMBERSHIP OF THE COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP 2

CONTENTS

TERMS OF REFERENCE I

1. EXECUTIVE SUMMARY 3

2. OVERVIEW OF THE CPTPP 4

2.1 CPTPP Outcomes – market access and rules 5

3. POSSIBLE US RE-ENGAGEMENT 8

4. ACCESSION 8

4.1 Interested economies 8

4.2 Accession framework 10

5. WHY THE CPTPP IS A SUITABLE VEHICLE TO EXPAND AUSTRALIA’S TRADING NETWORK 11

5.1 Benefits of expanded CPTPP membership 11

6. CONCLUSION 13



1. EXECUTIVE SUMMARY

• The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has become an important part of the global trade architecture since its entry into force in December 2018. It is one of the most comprehensive trade deals concluded to date

– it includes agreement to eliminate 98 per cent of tariffs in 11 economies with a combined GDP worth AUD 16.2 trillion, comprising 12.9 per cent of the global economy and with a combined population of over 500 million people.1

• Under the CPTPP, Australian business, exporters and consumers benefit from greater consistency of rules and regulations governing trade between the Parties to the Agreement

– this supports better-integrated and more resilient regional value chains in the Indo-Pacific, and reinforces the value of an open, transparent and stable trading environment.

• The CPTPP was designed as an open agreement, and the Parties have agreed an accession process to facilitate the entry of new members

– several economies have expressed interest in acceding to the CPTPP in recent years.

• The quality and ambition of the rules and market access commitments agreed by the 11 CPTPP signatories set a high standard

– and with that a clear expectation of what other interested economies must be prepared to commit to in order to secure membership of the Agreement.

• Prospective members would need to clearly demonstrate their commitment to implementing the agreement’s high standard trade rules and to delivering significantly enhanced market access

– ensuring that the accession of other economies delivers tangible benefits to exporters, importers and consumers in existing CPTPP Parties, including Australia.

• New accessions would require unanimous support from existing CPTPP Parties.

• The Department of Foreign Affairs and Trade (DFAT) supports expansion of the CPTPP membership beyond the 11 original signatories to economies that commit to implementing high standards of the agreement

– expansion would extend the modern, ambitious and high-quality trading rules of the CPTPP to other economies, in support of the open rules-based trading system

– in the wake of the economic impact of the COVID-19 pandemic, robust rules governing international trade are even more important

– and expanding the CPTPP membership will help to diversify our markets by opening up new export opportunities for Australian exporters and improve our competitiveness

» this is firmly in our national interest as a competitive, export-oriented nation.

1 Source: October 2020 revision of IMF World Economic Outlook database.



2. OVERVIEW OF THE CPTPP

The CPTPP is a free trade agreement negotiated between 11 economies: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Singapore and Vietnam. Together, these 11 economies have a combined GDP worth AUD 16.2 trillion, comprising 12.9 per cent of the global economy, and a combined population of over 500 million people. By building on Australia’s existing Free Trade Agreements (FTAs), as well as establishing our first FTAs with Mexico and Canada, two of the world’s top 20 economies, the CPTPP has provided new and improved opportunities for Australian goods and services exporters in CPTPP economies.

The CPTPP grouping represents a significant share of Australia’s export market. Australian exporters have already benefited from four rounds of tariff cuts since the entry into force of the CPTPP. In 2019, over one-quarter of our total merchandise exports went to the CPTPP Parties for which the Agreement is currently in force, worth nearly AUD 90 billion. This will grow to cover nearly AUD 100 billion in merchandise exports once all signatories have ratified the Agreement.

To demonstrate the current value of the CPTPP to Australia:

• in 2019-20 around 25 per cent of Australia’s beef, 10 per cent of sheepmeat, 63 per cent of pork, 22 per cent of cereals and grains, 33 per cent of dairy, 30 per cent of sugar, 12 per cent of cotton, and 15 per cent of wine exports went to CPTPP Parties

• Australia’s exports from the minerals and fuels sector to CPTPP Parties were worth around AUD 51 billion, with manufactured and other goods worth around AUD 22 billion

• in 2019 around 15 per cent of the Australian stock of investment abroad (valued at approximately AUD 447 billion) was in CPTPP economies

• and 17 per cent (worth AUD 15.3 billion) of Australia’s services exports went to CPTPP economies in 2019-20.

The Agreement was signed on 8 March 2018 and entered into force on 30 December 2018 for Australia, Canada, Japan, Mexico, New Zealand and Singapore, and on 14 January 2019 for Vietnam. Brunei, Chile, Malaysia and Peru are yet to ratify the Agreement.

The benefits of the CPTPP to Australia will continue to grow as each of the remaining signatories ratifies the Agreement. The Agreement will enter into force for each of these signatories 60 days after they notify other Parties of the completion of all relevant domestic legal processes. Australia is encouraging the remaining signatories to ratify the Agreement as soon as they can.

DFAT views the goal of having all Signatories ratify the Agreement as complementary to the goal of expanding the CPTPP’s value and reach through accession by new economies. Securing full ratification of the CPTPP will affirm the value the original members place on the Agreement and increase the incentive for other interested economies to seek to accede. Similarly, accession by aspirant economies may encourage the remaining signatories to ratify the Agreement owing to the CPTPP’s increasing commercial importance and the risks of not participating in a significant regional trade arrangement.



2.1 CPTPP OUTCOMES – MARKET ACCESS AND RULES

The CPTPP incorporates, by reference, the provisions of the Trans-Pacific Partnership (TPP) - the Agreement that was under negotiation with the US before it notified its intention to not become a Party - with the exception of a limited set of suspended provisions. Importantly for Australia, the CPTPP maintains the substantial market access package secured in the original TPP for goods and services and government procurement, as well as commitments on regulations on foreign investment.

The CPTPP includes agreement to eliminate more than 98 per cent of tariffs in the free trade area, established our first FTA with Mexico and Canada, two of the world’s top 20 economies, and builds on Australia’s existing FTAs. The CPTPP has delivered tangible benefits to Australian exporters to existing FTA partners, as well as new FTA partners, Canada and Mexico.

2.1.1 Market Access

Highlights for Australian goods exporters include:

• New reductions in Japan's tariffs on beef, with Australian exports worth AUD 2.4 billion in 2019-20.

• New and preferential access for dairy products into Japan, Canada and Mexico

– including new quotas for dairy products including cheese, milk powders and butter for Mexico and Canada

– elimination of tariffs on milk protein concentrates for Canada on entry into force; – elimination of Mexican tariffs on yoghurt – the elimination of a range of cheese tariffs for Japan covering over AUD 100 million of

trade.

• New sugar access into Japan, Canada and Mexico markets

– including elimination of the tariff on refined sugar into Canada; and a guaranteed 7 per cent quota of Mexico’s imports of sugar by volume.

• Elimination of beef tariffs in Canada within 5 years and Mexico within 10 years of entry into force.

• Tariff reductions, and new access for our cereals and grains exporters into Japan, including for the first time in 20 years, new access for rice products into Japan.

• Elimination of all tariffs on sheepmeat, cotton and wool by all Parties, in most cases on entry into force.

• Elimination of tariffs on seafood, horticulture and wine, including the removal of tariffs faced by Australian wine in Canada, our fourth largest wine export market, and all of Mexico’s tariffs for higher quality wine from 1 January 2020.

• Elimination of all tariffs on certain industrial products (manufactured goods) by all Parties.

• Elimination of Canada’s 2.5 per cent tariff on salt on entry into force.

Australian services exports to CPTPP Parties were worth AUD 15.3 billion in 2019-20, representing 17 per cent of our total services exports in that period. Australia’s services suppliers are particularly



well positioned to benefit from this Agreement which supports growth in services exports by removing key barriers and providing services suppliers with more transparent and predictable operating conditions.

These include:

• Legally guaranteed, improved conditions for Australia’s services exporters

– by providing transparent and predictable operating conditions so that exporters can invest with confidence

– and by automatically capturing future market reforms for the first time in markets with significant potential, such as Vietnam.

• New opportunities for Australian universities and vocational education providers to establish or expand a campus or institution in Japan, Mexico and Vietnam (as well as Brunei and Malaysia once those countries ratify).

• Guaranteed access for independent Australian education professionals to overseas institutions with streamlined visa arrangements and longer periods of stay.

• Better access for Australian education service providers, including commitments by Japan relating to teaching and research positions at universities and technology colleges which go beyond those in the Japan-Australia Economic Partnership Agreement (JAEPA).

• Commitments from Mexico which go beyond the General Agreement on Trade in Services (GATS) by guaranteeing access for new categories such as investors and contractual service suppliers.

• Longer periods of stay for Australian service suppliers in Vietnam in a broad range of key sectors, improving on commitments in the ASEAN-Australia-New Zealand FTA (AANZFTA), including the construction, engineering, environmental, legal, accounting, taxation and auditing, services incidental to mining, oil and gas and sporting services sectors.

For Australian investors, the Agreement secured preferential investment screening thresholds in CPTPP economies, and new openings in key markets such as mining and resources, telecommunications and financial services. The Agreement also delivers a more liberalised and predictable regime for the regulation of foreign investment.

For example:

• Canada now allows Australian investors to apply for an exemption from the 49 per cent foreign equity limit on foreign ownership of uranium mines, without first seeking a Canadian partner.

• Australian investments into Canada below CAD 1.5 billion and into Mexico below USD 1 billion are no longer screened.

• Australian investors also benefit from commitments by Japan and Vietnam (and Brunei once it ratifies) to only impose conditions on foreign investment on the initial sale of interests or assets owned by the government.



2.1.2 Modern Rules

CPTPP rules go further than our other FTAs in many respects and helps to increase standards and norms for trade and economic engagement across the Indo-Pacific region. The CPTPP provides greater consistency between Parties on rules of origin, as well as in the regulation of investment, intellectual property and e-commerce. This supports both better-integrated and more resilient regional value chains, and reinforces the value of an open, transparent and stable trading environment.

For example, the CPTPP includes:

• A common set of rules between the CPTPP Parties and any other economies that join. This includes one set of rules of origin and one standard set of documentation required to claim preferential tariff treatment. Common rules contribute to the functioning of global value chains by reducing the number of different regulatory settings businesses must navigate when they trade with multiple CPTPP Parties.

• Rules for electronic commerce supporting the flow of data, protecting privacy and consumer rights and combating 'spam'.

• Provisions on state-owned enterprises to ensure these entities make decisions on a commercial basis and compete with private enterprises on a level playing field, without receiving unfair advantages from the governments that own them.

• Commitments to combat bribery and corruption in international trade and investment, a first for Australia in an FTA.

• Commitments to adopt or maintain domestic provisions which criminalise (and appropriately sanction) corrupt behaviour in matters that affect international trade or investment.

• High quality standards for government procurement that are robust, transparent and allow suppliers to participate fairly in procurement processes.

• Rules ensuring that governments do not discriminate against foreign suppliers when assessing tenders and awarding contracts.

• High standards on labour rights by reaffirming CPTPP Parties' obligations as members of the International Labour Organization (ILO) and requiring Parties to have laws at the federal level of government that enshrine the rights set out in the ILO Declaration.

The CPTPP’s high quality and ambitious rules create an overall package that is widely considered the high bar for FTAs. Adherence to these rules by new members will further Australia’s objective of achieving a single, high-standard, rules-based trading system in the Indo-Pacific region, consistent with the objectives of the 2017 Foreign Policy White Paper.



3. POSSIBLE US RE-ENGAGEMENT

Australia would welcome renewed interest from the US in the CPTPP. The US played an integral role in the negotiation of the TPP. Following its notification that it did not intend to become a Party to the TPP in January 2017, the CPTPP was a collaborative effort of the other 11 signatories to give effect to commitments negotiated in the TPP and was concluded with the goal of US re-engagement in the future.

The CPTPP suspends a limited set of provisions included in the TPP Agreement. Should the US request accession to the CPTPP in the future, consensus among existing CPTPP Parties would be required to reinstate the suspended provisions. The US could also choose to re-engage with the TPP which has only been ratified by Japan and New Zealand and has not entered into force.

4. ACCESSION

The CPTPP is an open platform. New members are permitted if they can demonstrate their ability and willingness to meet the Agreement’s high standards and all existing Parties agree. All new members need to deliver against the comprehensive nature of the Agreement in terms of economic integration, high standard trade rules and enhanced market access.

4.1 INTERESTED ECONOMIES A diverse range of economies have publicly expressed interest in joining the CPTPP in recent years. These include China, Colombia, Indonesia, the Philippines, The Republic of Korea (ROK), Thailand, the United Kingdom (UK) and Taiwan. The interest shown by a range of economies affirms the significance of the CPTPP and the mutual benefit it offers in terms of its global standard trade rules and commercial value.

4.1.1 United Kingdom

Australia welcomes the UK’s formal request for CPTPP accession, lodged on 1 February 2021 (the only formal accession request lodged so far). As the world’s sixth largest economy by GDP and Australia’s fifth largest trading partner (in 2019-20), the UK would significantly increase the CPTPP’s reach, and enhance opportunities to expand trade and investment. While Australia’s current negotiation of a bilateral FTA with the UK remains our priority, the UK’s accession to the CPTPP would further promote economic integration and contribute to more resilient global value chains.

4.1.2 China

China has also indicated interest in CPTPP accession. At the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' meeting in November 2020, President Xi said China would favourably consider joining the CPTPP. China is the world’s second largest economy by GDP, and Australia’s largest trading partner (2019-20). Australia’s bilateral trading relationship is underpinned by the China-Australia FTA, which entered into force on 20 December 2015. Australia and China are also



signatories to the Regional Comprehensive Economic Partnership (RCEP), another significant regional trade agreement comprising the 10 ASEAN member states, Australia, China, Japan, the ROK and New Zealand.

4.1.3 Taiwan

Taiwan remains an important economic partner for Australia in our region and a strong advocate for open markets and global free trade in APEC and the World Trade Organization. Taiwan has signalled its intention to seek membership to the CPTPP. Both Australia and Taiwan are committed to pursuing freer regional and global trade through the multilateral system. Australia is Taiwan’s largest energy provider, and Taiwan is our 12th largest two-way trading partner (2019-20), as well as our seventh largest goods export market (2019-20).

4.1.4 Thailand

Australia has a substantial trading relationship with Thailand. Two-way trade in goods and services was worth AUD 21.5 billion in 2019-20, making Thailand our 10th largest trading partner. Australia’s trade relationship with Thailand is underpinned by the Thailand-Australia FTA (TAFTA). Australia and Thailand are also parties to AANZFTA and signatories to RCEP. TAFTA, which came into force in January 2005, has eliminated over 90 per cent of Thai tariffs on goods imported from Australia and improved our services and investment market access. AANZFTA is a trilateral agreement between ASEAN, Australia and New Zealand, which secured our first FTA with eight out of ten ASEAN member states and entered into force in January 2010. The Thai Government is considering CPTPP membership. In October 2020 a parliamentary committee delivered a non-binding report which recommended Thailand accede to the CPTPP at some point in the future.

4.1.5 Republic of Korea

The ROK indicated strong interest in accession during TPP negotiations, with President Moon expressing renewed interest in the CPTPP in December 2020. The ROK is Australia’s third-largest export market (AUD 27.6 billion in 2019-20) and fourth-largest trading partner (AUD 38.9 billion in 2019-20). Our economies are deeply complementary, with Australia exporting resources, food and manufactured products to the ROK, and importing products such as refined petroleum, cars, telecommunications equipment and computers. Our trade relationship is supported by the Korea-Australia Free Trade Agreement (KAFTA), and the ROK is also a signatory to RCEP.

4.1.6 Others

Indonesia is Australia’s 13th largest two-way trading partner and the Philippines is Australia’s 24th largest trading partner (2019-20). As both are ASEAN member states, our trading relationship is underpinned by AANZFTA and both are signatories to RCEP. In addition, the Indonesia-Australia Comprehensive Economic Partnership Agreement entered into force in 2020. In 2015, Indonesian President Widodo expressed interest in joining the then TPP. The Philippines has recently resumed a study into CPTPP membership. DFAT understands both are in the early stages of considering CPTPP accession.



Colombia is Australia’s 50th largest trading partner (2019-20), and both Australia and Colombia are involved in negotiations on the Pacific Alliance FTA. Colombia had previously expressed an intention to accede to the CPTPP, but the current Government says it does not intend to take that forward.

4.2 ACCESSION FRAMEWORK

To facilitate the entry of new members to the Agreement, the CPTPP Commission, the CPTPP’s decision-making body, adopted Accession Guidelines at the first Commission meeting in January 2019.

In the first instance, aspirant economies are strongly encouraged to discuss informally their interest in accession with all CPTPP Parties and Signatories before submitting a formal request to the CPTPP Depositary (New Zealand). Following a formal request, a decision to launch accession negotiations with an aspirant economy requires consensus support from all CPTPP Parties. The decision to launch accession negotiations would be made within a “reasonable time” after receiving the accession request and would be made public.

If CPTPP Parties agree to commence the accession process with the aspirant economy, an Accession Working Group with representation from all CPTPP Parties would be established. Each CPTPP Party must be satisfied with the outcome of the accession negotiations before the CPTPP Commission can approve the terms and conditions for the aspirant economy’s accession.

Thereafter, the aspirant economy would officially become a party to the CPTPP 60 days after either (a) the date on which the aspirant economy deposits its instrument of accession with the Depository indicating it accepts the terms and conditions for accession or (b) the date on which all Parties have notified the Depositary in writing they have completed their applicable legal procedures, whichever is later.

For all aspirant economies, Australia has undertaken to consider any formal accession application, once submitted, on its merits, in close cooperation with the other CPTPP Parties. Pursuant to the Accession Guidelines, aspirant economies must demonstrate the means by which they will comply with all of the existing rules contained in the CPTPP. They must also undertake to deliver a high level of increased market access for goods, services, investment, financial services and government procurement, as well as temporary entry for business persons, and to implement disciplines on State-Owned Enterprises. They must deliver commercially meaningful market access for each Party in a well-balanced outcome that strengthens the mutually-beneficial linkages between the aspirant economy and the Parties, while boosting trade, investment, and economic growth, and promoting efficiency, competition, and development. The Guidelines also note that the objective of comprehensive market access commitments agreed by CPTPP original Signatories should guide the level of commitments offered by aspirant economies. These benchmarks, which must be met by aspirant economies, ensure the integrity of the Agreement’s standards and rules, as well as its ambitious market access outcomes.

For any economy which submits a formal request for accession, DFAT will undertake extensive stakeholder consultations with industry bodies, business and civil society to inform our negotiating



positions and to ascertain priority areas for market access negotiations. This is consistent with Australia’s longstanding consultation practice for prospective or upgraded FTAs.

5. WHY THE CPTPP IS A SUITABLE VEHICLE TO EXPAND AUSTRALIA’S TRADING NETWORK

To build an even stronger economy, the Australian Government continues to pursue an active and ambitious open trade and investment agenda. Trade as a whole is equivalent to 45 per cent of Australian GDP and is directly responsible for one in five Australian jobs. Businesses with foreign investment generate around 40 per cent of Australia’s exports, and foreign investment supports one in ten jobs in Australia.

DFAT views the CPTPP as a suitable option to expand our trading opportunities, since the nature of the accessions process requires that any potential candidate, at a minimum, meet the CPTPP’s existing level of ambition. In order to gain CPTPP membership, economies need to deliver against the comprehensive nature of the agreement in terms of economic integration and global-standard of trade rules, and to offer enhanced market access. The Guidelines make clear that accession negotiations are limited to market access, with the aspirant economy required to demonstrate how it will comply with all of the existing rules in the Agreement.

In addition, the economic heft of the CPTPP in terms of global GDP coverage and population provides an attractive prospect to other economies. This should incentivise aspirants to offer the best deal possible in order to secure CPTPP membership and gain access to this significant market, and to realise efficiencies through a common set of rules and standards.

The COVID-19 pandemic has challenged not only our health systems, but also our economic and trading systems. The crisis has reinforced the critical importance of functioning and resilient supply chains that sit within an open, transparent and stable trading environment, for which the CPTPP provides a strong foundation.

5.1 BENEFITS OF EXPANDED CPTPP MEMBERSHIP

5.1.1 Deeper economic integration

As a plurilateral FTA, the CPTPP has created additional and longer-term integration benefits for Australian businesses, exporters and consumers beyond those that can be achieved through bilateral FTAs. By establishing a common set of rules between the Parties, the CPTPP is a step towards streamlining and simplifying rules under existing FTAs for Australian business. Businesses and exporters are able to count inputs sourced from any of the CPTPP Parties when determining whether a good can be traded under the CPTPP’s preferential trading arrangements. This results in lower tariff rates on inputs as well as the final product.



These common rules contribute to the functioning of global value chains by reducing the number of different regulatory settings businesses must navigate when they trade with multiple CPTPP economies. Australian businesses only need meet one set of common rules and use one set of documents to export to other CPTPP economies. This results in cost savings and efficiency gains for Australian businesses, exporters and consumers, which will continue to increase as CPTPP membership expands. The Agreement also enhances regional integration in setting out rules for digital trade that support the flow of data, protecting privacy and consumer rights and combating ‘spam’.

Membership expansion would commit economies to higher standards and rules, including on anti-corruption, labour standards and state-owned enterprises. Entrenching principles of rules-based and open trade benefits the Indo-Pacific region. In addition, predictability and transparency of trading rules better facilitate trade among the CPTPP economies, furthering regional economic integration. Expansion of the CPTPP in our region would also deliver greater certainty and transparency for Australian exporters, as Asia comprises 65.7 per cent of Australia’s trade overall and stands to deliver nearly two-thirds of global growth to 2030.

5.1.2 Enhanced international engagement

The institutional frameworks in each of our FTAs ensures regular and open dialogues with our trading partners. The CPTPP provides for ministerial and officials’ level dialogues with CPTPP trading partners. CPTPP Commission and Committee mechanisms provide forums to address the better functioning of trade rules and supply chains in our region, while the CPTPP’s development provisions encourage cooperative activities aimed at enhancing broad-based economic growth.

For economies with which Australia does not have an existing FTA, accession to the CPTPP could be an efficient way to secure preferential market access for Australian exporters. The standards and rules are already established, meaning accession negotiations would focus primarily on market access outcomes, reducing the likelihood of protracted negotiations. It also ensures that market access outcomes can be realised under a common regional framework of rules and standards, creating greater efficiencies for Australian exporters and reducing transaction costs.

5.1.3 Building on Australia’s existing FTAs

Additional accessions to the CPTPP represents a valuable opportunity for Australia to diversify its trade. Australia would be able to seek improved access for our exports of goods and services, as well as greater certainty and predictability for our exporters and investors. For example, through the CPTPP Australia secured improved access across a range of goods exports to Japan, beyond those in JAEPA, including on Australian beef. For Australian wine entering Vietnam, the CPTPP will achieve full tariff elimination on sparkling wine by 2028, with exporters benefiting from faster tariff reductions than under AANZFTA.



5.1.4 Expansion will complement, not compete with Australia’s existing FTA network

In considering the best pathway for Australia to expand and strengthen its trading links with another economy, it is important to note that accession to the CPTPP would not preclude also negotiating a bilateral FTA or upgrading of an existing FTA with Australia. Similarly, upgrading or securing a new bilateral FTA with Australia does not preclude an economy’s future accession to the CPTPP. Each avenue presents an opportunity to identify gaps or improve terms for Australian exporters, or to address other issues such as non-tariff barriers. Australia’s negotiating position will always be guided by the views of stakeholders, consistent with Australia’s FTA practice.

The CPTPP is one of Australia’s network of FTAs, which are considered mutually reinforcing and complementary. Australia has 15 FTAs in force, the majority of which are bilateral agreements. As with the CPTPP, other plurilateral and bilateral FTAs are useful in binding economies into rules that in many instances go beyond existing standards, as well as by creating preferential market access.

The CPTPP is a valuable framework, but it may not be suitable for all trading partners, including those whose current trade and investment settings would make it difficult to meet the Agreement’s high standards or comply with its rules. RCEP, AANZFTA and bilateral FTAs also provide useful frameworks for advancing Australia’s interests. Ultimately, the best pathway for expansion of Australia’s trade opportunities will vary depending on the economy in question.

6. CONCLUSION

Since entering into force over two years ago, the CPTPP has increased market access for Australian exporters of goods and services to a regional free trade area with a combined GDP worth AUD 16.2 trillion. Expansion of CPTPP membership will increase the commercial benefits of the CPTPP and create a multiplier effect for those benefits already flowing to Australia from the Agreement.

As a trade- and investment-oriented nation, DFAT views accession by additional economies to the CPTPP as an important opportunity to improve Australia’s competitiveness in existing export markets and to open up new markets for Australian exporters and investors, while also benefiting consumers through greater choice and lower prices domestically.

The CPTPP remains a high watermark for FTAs and was designed as an open agreement. It has an agreed accession process. The accession process requires potential candidates to meet high standard trade rules of the CPTPP and to offer enhanced market access for exporters.

Accession negotiations under the auspices of the CPTPP will be focussed on market access. In this way, we can expect that accession by interested economies will maintain and extend the Agreement’s high standard rules while also delivering commercially-meaningful outcomes for Australia.



Expanding the CPTPP will bolster regional and global economic integration and strengthen rules-based trade in the dynamic Indo-Pacific region. As well as economic benefits, expanding the reach of the CPTPP will advance our foreign policy objectives by strengthening our bilateral relationships.

DFAT supports expansion of CPTPP membership to economies that can meet the Agreement’s high standards and commitments. The Australian Government’s position will always be informed by extensive stakeholder consultation and any decision to expand our trading opportunities through the CPTPP will be made on a case-by-case basis.


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